A man who grew up in Cape Elizabeth and has portrayed himself as a Scottish aristocrat and a descendant of a prominent Maine industrialist is accused of making $167,000 in fraudulent medical and food-stamp claims in Minnesota.

In a bizarre reversal of fortune, Colin Chisholm III, 62, and his wife, Andrea Chisholm, 54, are sitting in jail cells in Hennepin County, Minn., because they are unable to post $300,000 bail. The couple, who called themselves “Lord and Lady Chisholm,” had more than $3 million in bank accounts and owned a $1.2 million yacht while receiving government assistance over a five-year period, according to prosecutors in Minnesota.

Additional Photos

Colin Chisholm III, 62, who grew up in Cape Elizabeth, is jailed in Minnesota on fraud charges.

Chisholm's wife, Andrea Chisholm, is also in jail in Minnesota on fraud charges.

Colin Chisholm claims he is a descendant of Hugh J. Chisholm, a Portland entrepreneur who founded International Paper, shown in a detail shot taken from a photo provided by Maine’s Paper & Heritage Museum. Photo from Collections of Maine’s Paper & Heritage Museum, Jay, Maine. Courtesy of www.MaineMemory.net, item #75485

Prominent Maine industrialist Hugh J. Chisholm is buried in this granite mausoleum in Portland’s Evergreen Cemetery. At the time of his death in 1912, he was the most powerful man in the pulp and paper industries of North America. Gabe Souza/Staff Photographer

The Chisholms were arrested March 31 in Florida after being tracked down in the Bahamas. They had been on the run with their 7-year-old son after an arrest warrant was issued for them in February.

When Colin Chisholm lived in Maine, he told people he was a descendant of Hugh J. Chisholm, a Portland entrepreneur who founded International Paper and brought industry to Rumford. At the time of his death in 1912, he was the most powerful man in the pulp and paper industries of North America.

Hugh J. Chisholm is buried in Portland’s Evergreen Cemetery, and his granite mausoleum was among four of the most expensive private monuments built in the U.S. at its completion.

But Colin Chisholm’s connection to the famed industrialist is as suspect as his business ventures.

In the early 1990s, while living in Portland, he tried to re-establish Chisholm Bros. Publishing, a company that Hugh J. Chisholm had founded. The original company sold illustrated postcards featuring towns in New England and along the East Coast, said Will Bartlett, a Portland resident who wrote a golf book for Colin Chisholm that was never published because he said Chisholm wasn’t able to pay the printer.

At the same time, Chisholm was looking for investors for another Portland company he created, the Caribbean Network. The company was formed to broadcast entertainment and business shows to tourists in the Caribbean and on cruise ships, according to a 1993 story in the Portland Press Herald.

One investor, Bernard Aiello, lost thousands of dollars and had to move with his wife into the home of one of their children, according to his son, Michael Aiello, who lives near Syracuse, N.Y. The elder Aiello, 74, is unable to speak because of a stroke, but his son said the family is happy that Chisholm has been arrested. They believe Chisholm was a con artist.

Chisholm later moved his television business, which he renamed TCN Networks, to Miami. He listed it as one of the several companies he owned in a 2012 business executives networking website.

Chisholm’s lawyer in Minnesota, Tom Kelly, said the company is a legitimate business that just failed to make money like most startups.

Chisholm has no criminal record in Maine, and his name does not appear in the databases of the Maine Office of Securities, which protects investors.

ACCUSED OF HIDING WEALTH

Chisholm moved to Minnesota at some point before 2000, when prosecutors say he and his wife began committing welfare fraud.

While Colin Chisholm was telling potential investors he was worth millions, prosecutors say, he was telling welfare agencies in Minnesota that he and his wife were broke.

In 2007 public assistance paperwork, for example, the Chisholms claimed they had just $80 in cash and no assets, the recent criminal complaint said.

At the time, the couple concealed that they were receiving welfare benefits from Florida, the complaint said, as well as the existence of several large bank accounts they controlled. Between 2005 and 2012, $2.6 million had been deposited in those accounts, according to the complaint.

Chisholm is skilled in deception, said his ex-wife, Virginia Chisholm, who now lives in North Carolina. She claimed that Chisholm took nearly $70,000 out of her 401(k) fund and never repaid it.

“He would take a little bit of the truth and exaggerate a lot,” Virginia Chisholm said.

She said Chisholm was born in Salem, Mass., and grew up in Cape Elizabeth. His mother, Mary Chisholm, won a seat in the Maine Senate in 1965, the first woman Democrat to do so.

Virginia Chisholm said she believes her ex-husband is a distant relative of Hugh J. Chisholm, the Portland industrialist, but he doesn’t know anybody in the Chisholm family.

Brewster Harding, who did some work for Chisholm Bros. Publishing in the early 1990s, said Colin Chisholm left the state around 1994 because of financial troubles.

“He was the kind of person who led people along and then disappeared,” Harding said. “He was typical of someone who was a dreamer (but) can’t put it together.”

Harding said Chisholm knew so many details about the life of Hugh J. Chisholm – such as the location of his large home on State Street – that he was able to convince him of his lineage.

LINK TO ARISTOCRACY IS SUSPECT

A Press Herald review of the obituaries of Hugh J. Chisholm and his descendants and a review of online genealogy databases failed to find a link between Colin Chisholm and Hugh Chisholm.

Colin Chisholm’s claims to Scottish aristocracy also appear unsupported. According to the website for one of the couple’s companies, Strathglass Kennel, which breeds Cavalier King Charles Spaniels, Colin Chisholm traces his roots to the Clan Chisholm from the small village of Struy in the Scottish Highlands.

Villagers there told a British news site, The Mail Online, that they had never heard of the title Lord Chisholm.

Although Hugh J. Chisholm’s parents were immigrants from Scotland, he was no aristocrat. At age 13, after the death of his father, he quit school and sold newspapers on the Grand Trunk trains between Toronto and Detroit. He eventually controlled the distribution of newspapers and magazines through the entire railway, which terminated in Portland on India Street.

Within a few years, he began investing in the rapidly expanding pulp and paper industry in the state.

Kelly, Colin Chisholm’s attorney, said his client admits to not adequately disclosing his finances to Minnesota welfare agencies, but claims he was so heavily in debt that he was virtually indigent and would have qualified for assistance. His said he wants to negotiate a plea so the couple can leave jail and be reunited with their son.

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